Increasing Global Population Intensifies Demand for Food and Beverage Distribution, Finds Frost & Sullivan
High-efficiency and innovative solutions for infrastructure challenges will be vital for successful food and beverage distributors
MOUNTAIN VIEW, Calif. - Emerging economies such as Brazil, Russia, India, China, Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa are growing at a faster rate than rest of world combined. This growth bodes well for the worldwide food and beverage (F&B) distribution services market, as globalization has created a level playing field for food and beverage distributors across regions.
New analysis from Frost & Sullivan (http://www.food.frost.com), Global Food and Beverage Distribution Services Market, finds that the market earned revenue of $865.2 million in 2012 and estimates this to reach $1.41 billion in 2019. In fact, with the world population expected to cross 9 billion by 2025, demand for F&B distribution services will likely double by that year.
While North America and Europe will see reduced market shares in the coming years due to saturation and consolidation, developing countries will gain share of market due to higher incomes and the rise of the middle class. Growth of F&B distribution services will also receive a massive boost in exponential growth from the retail sectors of emerging countries. The commodity price index and agricultural raw material price index are moving upward, which indicate a continued climb in food prices.
“The cost of fuel and labor is shooting up along with input costs of manufacturing, which will have a huge impact on the costs of transport, storage and distribution,” said Frost & Sullivan Food & Agriculture Program Manager Christopher Shanahan. ”Distributors will have to be innovative to cater to the market’s dynamic needs, including collaboration with local partners to gain a better understanding of the market, which can more effectively tackle infrastructure challenges.”
Local partner companies for F&B distributors are often third party logistics (3PL) service providers, a segment that is fast evolving. Companies will mostly employ 3PL service providers for their expertise in and resources for optimizing distribution services. The investment in innovative methods and technologies will squeeze the profit margins for participants, but will also help keep efficiency high and act as a market differentiator.
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Global Food and Beverage Distribution Services Market is part of the Food and Beverage Ingredients Growth Partnership Service program. Frost & Sullivan’s related research services include the global F&B processing support markets. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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